Several explanations have been proposed for the disparate or conflicting findings about whether medical care has high or relatively low returns. One hypothesis is that medical care is valuable but is often applied inappropriately. For example, areas that spend a lot on medical care may simply give the technology to more people than will benefit from it. Much evidence supports the view that medical care is frequently wasted. Studies of medical procedure use in the United States, for example, find that a significant number of patients receiving high-tech services should not receive them on the basis of published clinical studies (Chassin et al., 1987; Winslow et al., 1988a, b; Greenspan et al., 1988). Other evidence is less supportive, however, finding that rates of inappropriate procedure use are no greater in areas with high usage rates compared to areas with lower usage rates. Reconciling conflicting evidence about the value of medical care is an important priority for future research.
It also has been proposed that preventive care is used in inverse proportion to more intensive medical services, so that people not receiving intensive treatment still have good outcomes. This is claimed to explain the lack of outcome differences between the United States and Canada. Canada has more complete coverage for outpatient pharmaceuticals than does the United States. Increased use of pharmaceuticals may allow Canadians to live longer, offsetting the survival advantage that comes from more intensive procedure use in the United States.
The distinction between over-time and point-in-time analysis must also be considered in evaluating the effectiveness of medical care. Many studies that find that medical care has a high rate of return compare treatments at different points in time, that is, before and after a particular technology is available. For example, changes in the treatment of heart attacks during the 1980s are associated with large increases in survival (Cutler and Sheiner, 1998). The same is true for care of low-birth-weight infants between 1950 and 1990 (Cutler and Meara, 2000). In contrast, studies that find that medical care has a low rate of return generally look at the use of the same treatment in different localities at the same point in time. Differences in use at a point in time may be more wasteful than increased use over time.
An increasing number of cost-effectiveness analyses of preventive strategies and alternative therapies are appearing. For example, Trussell et al. (1997) analyzed the economic benefits of adolescent contraceptive use utilizing information from a national private payer data base and from the California Medicaid program. Their study estimated the costs of acquiring and using 11 contraceptive methods appropriate for adolescents, treating associated side effects, providing medical care related to an unintended pregnancy during contraceptive use, and treating sexually transmitted diseases (STDs) and compared them with the costs of not using a contraceptive method. The average annual cost per adolescent at risk of unintended